D&K Healthcare Resources to Be Acquired by McKesson Corporation; D&K Customers Will Gain Access to Expanded Range of Products and Services.ST. LOUIS -- D&K Healthcare Resources, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DKHR), a leading pharmaceutical, health and beauty products distributor to independent and regional pharmacies, announced today that it has signed a definitive agreement to be acquired by McKesson Corporation (NYSE NYSE See: New York Stock Exchange :MCK MCK McKinsey & Company (consulting firm) MCK Mohawk Council of Kahnawake (Quebec) MCK Mon Colle Knights (children's TV show) MCK Mirror Classes Kit MCK Maintenance Check ), a leading pharmaceutical distributor and healthcare services company. Under the agreement, Spirit Acquisition Corporation, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of McKesson, will commence a tender offer for all outstanding D&K shares for $14.50 in cash per share. McKesson will also assume D&K's outstanding debt. "This transaction makes strategic sense for both companies," said J. Hord Armstrong, III, D&K Healthcare's Chairman and Chief Executive Officer. "D&K Healthcare and McKesson share a strong commitment to customer relationships and are both focused on providing good value to the independent and regional pharmacies they serve. That fit is what led McKesson to propose this combination and our board to approve it." "The anticipated addition of D&K Healthcare demonstrates McKesson's commitment to its core pharmaceutical business and to the independent segment," said Paul Julian Paul Julian (June 25, 1914 - September 5, 1995) was an American artist and designer most noted for his work as a background artist for Warner Brothers' Looney Tunes cartoon shorts. He worked primarily for director Friz Freleng's Sylvester and Tweety Bird spots. , Executive Vice President and Group President, McKesson Corporation. "D&K Healthcare represents a natural fit for McKesson in terms of geographic presence, business model, and customer approach. With its intimate customer relationships and strong regional presence, D&K Healthcare will help complement McKesson's current pharmaceutical distribution footprint. The combination of McKesson's and D&K Healthcare's capabilities will help position both companies' customers to become stronger." "We've built our business on strong customer relationships and high-touch customer service," Armstrong said. "When this transaction is completed, our customers will enjoy the best of both worlds - the highly personal service they've come to expect from us, coupled with the additional products and services that McKesson provides." The acquisition is expected to close in the third quarter of 2005, subject to customary conditions, including regulatory review. D&K Healthcare will become part of McKesson's U.S. Pharmaceutical business. About D&K D&K Healthcare Resources, Inc., which had fiscal 2004 sales of $2.5 billion, is a full-service wholesale distributor of branded and generic pharmaceuticals and over-the-counter health and beauty aid products. Headquartered in St. Louis, D&K serves three classes of customers from seven distribution centers: independent, and regional pharmacies with locations in one or more of 27 states, primarily in the Midwest, Upper Midwest The Upper Midwest is a region of the United States with no universally agreed-upon boundary, but it almost always lies within the US Census Bureau's definition of the Midwest and includes the states of Minnesota and Wisconsin, as well as at least the Upper Peninsula of Michigan. and South; national accounts that operate locations in multiple regions of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ; and other healthcare providers including hospitals, alternate-site care providers, and pharmacy benefit management A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. companies in its primary distribution area. D&K also offers a number of proprietary information systems, marketing and business management solutions, and owns Pharmaceutical Buyers, Inc., a leading alternate-site group purchasing service located in Broomfield, Colo. More information can be found at www.dkhealthcare.com. About McKesson McKesson Corporation (NYSE:MCK), currently ranked 15th on the Fortune 500, is a healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes and improving the quality and safety of patient care. Over the course of its 172-year history, McKesson has grown by providing pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. automation; and services for manufacturers and payors designed to improve outcomes for patients. More information can be found at www.mckesson.com. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements within the meaning of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements are inherently subject to risks and uncertainties. The company's actual results could differ materially from those currently anticipated due to a number of factors, including without limitation, the competitive nature of the wholesale pharmaceutical distribution industry with many competitors having substantially greater resources than D&K Healthcare, the company's ability to maintain or improve its operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: with the industry's competitive pricing pressures, the company's customers and suppliers generally having the right to terminate or reduce their purchases or shipments on relatively short notice, the ability to maintain prime vendor status with cooperative buying groups, the availability of investment purchasing opportunities, the company's ability to complete and integrate acquisitions successfully, the changing business and regulatory environment of the healthcare industry in which the company operates, including manufacturers' pricing or distribution policies or practices, changes in private and governmental reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. or in the delivery systems for healthcare products, changes in interest rates, and other factors set forth in reports and other documents filed by D&K Healthcare with the Securities and Exchange Commission from time to time. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are made. D&K Healthcare undertakes no obligation to publicly update or revise any forward-looking statements. This announcement is neither an offer to purchase nor a solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to sell shares of D&K. McKesson has not yet commenced the tender offer described herein. The tender offer will be made only through a tender offer statement. Investors and shareholders are strongly advised to read the tender offer statement (including the offer to purchase and related letter of transmittal Letter of Transmittal A document used by security holder to accompany certificates surrendered in an exchange or other corporate action. ) in its entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. when it is filed and becomes available because it will contain important information. At the time the offer is commenced, McKesson will file the tender offer statement with the U.S. Securities and Exchange Commission and D&K will file a solicitation/recommendation statement with respect to the offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement, will be made available to all shareholders of D&K at no expense to them. The tender offer statement (including the offer to purchase, the related letter of transmittal and all other documents filed with the Commission), the solicitation/recommendation statement and other filed documents will also be available for free at the Commission's Web site at: www.sec.gov. |
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